The post Bankruptcy: The Opportunity, But Not The Entitlement, To A Fresh Start appeared first on Baltimore Bankruptcy Lawyer.
]]>The discharge in bankruptcy has been described as “unquestionably the heart and soul of the ‘fresh start’ that Congress intended to provide the poor but honest debtor in bankruptcy.” In re Jones, 367 B.R. 564, 568 (E.D. Va. 2007). Back in 1934 the US Supreme Court articulated the power of the fresh start by explaining that a bankruptcy discharge
gives to the honest but unfortunate debtor who surrenders for distribution the property which he owns at the time of bankruptcy, a new opportunity in life and a clear field for future effort, unhampered by the pressure and discouragement of preexisting debt.
Local Loan Co. v. Hunt, 292 U.S. 234, 244, 54 S. Ct. 695, 699, 78 L. Ed. 1230 (1934).
Certainly, there is a cost to this fresh start. Besides the filing fee (which can be waived for the neediest of debtors) there is the obligation of “good faith”. Among the 7,529 case results for “fresh start”, the phrase “good faith” appears 2,055 times. In testing whether a debtor has acted in good faith, bankruptcy courts look to a number of factors, including:
To earn their fresh start, debtors must do more than simply submit their names and social security numbers to the bankruptcy court. This is why the initiating document in bankruptcy court is called a “Petition”: debtors are petitioning the court to grant them a discharge of their debts. The petition is granted only after the debtor fairly, completely and accurately discloses their assets and debts, income and expenses under penalty of perjury. In this way, by engaging in honest and forthright conduct, a debtor will enjoy the powerful fresh start promised by the Bankruptcy Code in the American system of laws and government.
The post Bankruptcy: The Opportunity, But Not The Entitlement, To A Fresh Start appeared first on Baltimore Bankruptcy Lawyer.
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